How much money can you make owning a bed and breakfast business?

15 replies [Last post]
Offline
Joined:
10/07/2008

 from the B & B Coach

How much money can you make owning a bed and breakfast business? 

__________________

Gluten free is never free. - Joey Bloggs

 

Offline
Joined:
05/22/2008

 What gets me is they talk about the write offs. We never had any that made much of any difference when it finally came to tax time. And now I find we will still be responsible for what we did all those many years ago with the upgrades to the house for the business Sad  Maybe by the time we do sell this will have changed...I sure hope so.

gillumhouse's picture
Offline
Joined:
05/22/2008

catlady wrote:

 What gets me is they talk about the write offs. We never had any that made much of any difference when it finally came to tax time. And now I find we will still be responsible for what we did all those many years ago with the upgrades to the house for the business Sad  Maybe by the time we do sell this will have changed...I sure hope so.

They are not write-offs, they are deductions. Businesses write-off uncollectible receivables, donations (mostly in retail), and things they will never see revenue from (like hospitals with charity cases). Deductions are business expenses. I do not have write-offs because I do not have guests who stiff me on their room charges.

Because I am listed a 2/3 commercial at the assessor's office, I can claim 2/3 of my utilities. Maybe it is because I am only 3 rooms that the deductions are significant for me. As for the things JB listed - I learned quickly to NOT claim linens etc on my taxes because I would be paying on them forever. I have enough deductions with my utilities, advertizing, and food that I do not need them. I spend a LOT on advertizing and marketing. Again with 3 rooms in Podunk I do not wear them out like they would be if I was in a destination.

Offline
Joined:
05/22/2008

 yes..I know...business deductions....I used the term write off loosely. I should have known better.

But still.... no matter what you call it, it did us no good at all.

We only had 3 rooms and only opened 9 out of 12 months...so that could be our issue. Our CPA would not let us take any percentages of utilities etc etc. Of course the big stuff got amortized, but like I said we still have to pay that back even though we have been closed for almost 5 years now. He says you can never forget that..it won't go away Sad  And yes, the business property stuff gets charged every year. Sure deduct dues, business meetings, travel mileage etc. It still never amounted to a hill of beans for us. I always had to pay more to IRS and state every year. Guess I just made to much with my retirement income because it sure wasn't because of the B & B. We would have never made it if we would have had to depend on just B & B income to live.  So yes..thanks to my employer the state of OH and the Fed Gov't. we didn't need it. 

gillumhouse's picture
Offline
Joined:
05/22/2008

I worked part-time. In our early years, we used the savings bonds to do upgrades and I took 10 years to drain my 401k for med expenses not covered by DH's disability medical (and advertising). What saved us was we did not have a mortgage to start with and when we sold the Illinois house we were free & clear with a few dollars to boot - that went quickly! What made the difference is we had few expenses other than his meds. Neither of us has ever been a shopper (although his hobbies were ALWAYS something expensive), I never smoked and he quit eons ago, and we rarely drink. So our personal expenses have not been a lot, so we do not need much to live on. He can't travel and I am content where I am. I could live on just MY SS.

Offline
Joined:
10/07/2008

The term write offs was from the first comment in the article. 

It is one of those funny things. "I have a mortgage so I can deduct the interest" so in other words you have to PAY it to deduct it, watson.  - Referring to the first comment in the article and that mentality.

gillumhouse's picture
Offline
Joined:
05/22/2008

Yes, I posted a comment on the article about that too.

Offline
Joined:
10/07/2008

catlady wrote:

 What gets me is they talk about the write offs. We never had any that made much of any difference when it finally came to tax time. And now I find we will still be responsible for what we did all those many years ago with the upgrades to the house for the business Sad  Maybe by the time we do sell this will have changed...I sure hope so.

You mean like paying business tax (insert - EVERY YEAR) on the sign, the rocking chairs, the fence and the pond, oh and the cutlery, the linens and anything we buy if we want to "write them off" as part of a business expense?

Yeah righto.

Madeleine's picture
Offline
Joined:
09/29/2011

catlady wrote:

 What gets me is they talk about the write offs. We never had any that made much of any difference when it finally came to tax time. And now I find we will still be responsible for what we did all those many years ago with the upgrades to the house for the business Sad  Maybe by the time we do sell this will have changed...I sure hope so.

That did strike a sour note in the whole thing. We explain over and over to guests who think this is great as we can have family over all the time, that if we don't charge family then we can't claim the whole inn portion as a business. Which makes no sense because I bet Paris doesn't pay when she stays at one of the family hotels!

__________________

Everyday, for good or ill, we intersect with some else's story and become a part of it.

 

Madeleine's picture
Offline
Joined:
09/29/2011

 so while the first year’s start-up costs might be more, don’t forget to include a generous maintenance budget for future years.

Amen to that statement!

Offline
Joined:
10/07/2008

Sorry I began to read the comments to find your Cambs and got stumped by this one:

 and flexibility of the business .

Okay let's be honest, what does flexible mean? Yes you are the boss but you are here 24/7 for the most part, every day of the year unless  you can chew your leg out of the trap and escape.  

Madeleine's picture
Offline
Joined:
09/29/2011

Joey Bloggs wrote:

Sorry I began to read the comments to find your Cambs and got stumped by this one:

 and flexibility of the business .

Okay let's be honest, what does flexible mean? Yes you are the boss but you are here 24/7 for the most part, every day of the year unless  you can chew your leg out of the trap and escape.  

2 rooms. You can be very flexible with 2 rooms.

Offline
Joined:
10/07/2008

Madeleine wrote:

Joey Bloggs wrote:

Sorry I began to read the comments to find your Cambs and got stumped by this one:

 and flexibility of the business .

Okay let's be honest, what does flexible mean? Yes you are the boss but you are here 24/7 for the most part, every day of the year unless  you can chew your leg out of the trap and escape.  

2 rooms. You can be very flexible with 2 rooms.

True. But the article was about making money, so I figured they meant a financially viable B&B (to take that term from another B&B person).

Madeleine's picture
Offline
Joined:
09/29/2011

Well, they can be flexible to have other employment. Or to open the inn up for other events. Not knowing, maybe they are living a very relaxed retirement life where the flexibility comes from closing for 6 months to go visit family. Or they only open on weekends.

Oddly, I like this job of mine because I don't have to get up and go to work 5 days/week. Sure, I work 150 days straight sometimes, but I don't have to get up and go to work 5 days/week. It makes no sense unless you live it. We tell guests (who, BTW think we're lying) that we don't have a day off from May through Oct. These are people whinging about having just had a weekend away and now they have to go back to work. Meanwhile, we haven't had even a day off, much less a weekend away in 4 months.

I would rather do this than have to go to work on Monday. (Of course, I don't have to go to 'work' now for another 2 weeks, but hey, thems the breaks. It's the slow season.)

Joey Camb's picture
Offline
Joined:
04/02/2010

Do you like my comment? "Depends on if you are any good at it!" ha ha ha

__________________

Don't mess with me today or I will kill you!!!!

 

InnBloom's picture
Offline
Joined:
09/03/2010

Ha!  Good point, Camberley!

__________________

Bloom where you're planted...

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.